The Department of Labor has proposed the implementation of a fiduciary rule which would require all financial services professionals, including stock and insurance brokers, to put their clients’ interests before profit or commission considerations. The proposed rule is currently on hold, but if approved, it could ban commission sales of investment products. This would present investors with a quandary: What if it’s in the investor’s best interest to pay a commission?
“If the industry did away with commissions, a lot of those small, small clients are going to be left by the wayside,” Diane Jochimsen, MS, CFP®, president of White Raven Financial, said during a recent interview with “Advisors Magazine.” “If we have these simple IRAs and a small business owner has a SIMPLE IRA, these people just starting out have nothing and we have to take care of those people as well.”
White Raven Financial provides fee-only comprehensive investment and financial planning services. Additionally, the firm offers hourly consulting services to clients who cannot – or don’t want to – pay advisory fees, but need specific questions answered. White Raven Financial maintains a $200,000 firm minimum.
Hourly consulting allows Jochimsen to assist younger clients who recently started saving and need some direction in developing a financial plan. Many of those clients wouldn’t benefit from paying a full advisory fee and keeping an advisor on standby, meaning that the fiduciary ruling may complicate serving this niche in some ways, she added.
“Sometimes people just have a question they need help with, and I’m okay with that,” Jochimsen said.
White Raven Financial is a fiduciary, meaning that clients’ best interests come before commissions or the bottom line. While the firm does not offer commissionable accounts, Jochimsen does not think that all financial professionals need to operate on a fee only basis.
“There is a place for both types of advisors in the financial services industry,” she said.
Jochimsen tries to work with her clients by educating them about how financial products work, empowering them to make their own decisions, and by sidestepping complex financial jargon in favor of simpler explanations.
“I try to find out what works best, we all learn differently,” Jochimsen said. “What we try to do is provide a better customer experience. Say things like alpha and beta, the client has no idea what you’re talking about. What we try to do in our customer experience is align the portfolio to the customer’s risk tolerance and goals.”
Jochimsen, a former computer programmer, started in the financial services industry with four clients, “Friends who trusted me,” she said. Now, White Raven Financial, based in Arlington, Washington, is adding two more advisors in the coming year and looking to grow its client base. The firm prides itself on being a standby resource for people regardless of their financial experience level.
“I don’t avoid information,” Jochimsen said, adding that she takes the time to understand her clients’ individual needs, and doesn’t just take a cookie-cutter approach to investing. “I make sure to find out where they are at, and then I fill in the gaps.”
For more information see www.whiteravenfs.com
Diane Jochimsen offers advisory services through White Raven Financial, a Registered Investment Advisor in the state of Washington.
